Just like any new area of investment, cryptocurrencies make possible investors ask many questions. In the last few years, digital currencies have grown in popularity. But, there are myths about cyrptocurrencies including Bitcoin that make people skeptical about investing in them. Are you considering investing in Bitcoin? If so, knowing about the following common myths will help you make a solid decision:
Bitcoin is Mainly Used for Illegal Online Activities
This myth is true to all types of digital currencies. The myth may have started because of the anonymity that is critical to most cryptocurrencies. Bitcoin is the first major digital currency which makes it popular in black markets. Although aspects of Bitcoin might be attractive to online criminals, what’s actually illegal is the transaction itself and not the digital currency.
Bitcoin Does Not Have Value
Aside from gaining in prominence and popularity, Bitcoin is set up in a way to reduce the risks involved in online transactions. Just like other kinds of currencies, Bitcoin can be exchanged for products and services and their value is based on the belief of the currency’s holders. These days, more and more businesses and services are accepting Bitcoin, making it more valuable than ever. And the number of exchanges such as Paychainis growing to help investors buy or sell bitcoins.
Bitcoin Mining is Not Good for the Environment
Every mining rig requires huge amounts of computational power that in turn requires big amounts of electricity. But, it is important to note that Bitcon’s mining value almost always outweigh the real-world cost required to complete the mining operation. Also, Bitcoin has set up hard caps on the total number of coins that can be mined. Once the number is obtained, mining for new coins or tokens will no longer be possible. This will mean a significant decrease in the cost of computational power required to mine the currency.
Bitcoin is a Scam
Many initial coin offerings have been fraudulent in different ways. But, savvy investors treat Bitcoin and other digital currencies with a healthy dose of skepticism and a huge amount of caution and research. Fraudulent activities also exist in real-world investing if investors don’t take the time to consider and learn about their investment opportunity thoroughly.Just as investors need to shift through good and bad possible investments in the real-world financial landscape, Bitcoin investors must sort through fraudulent investment opportunities. Although this cannot be completely eliminate the risk of scam, it can help in reducing those chances.